COLLEGE OF HEALTH, AGRICULTURE AND NATURAL SCIENCES

COURSE OUTLINE
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 NSHA 301 Health Economics and Health Care Financing        

Lecturer: Mr. Thomas Masese

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Course Description and Objectives

This course looks at different methods of financing health services in different parts of the
world, their merits and demerits and their impact on the health of the general population,
vulnerable groups, community and individual health are discussed. The contribution of health
sector to national economies and development is examined.
All around the world people fall ill, and all around the world resources are used to try and
make them better. This is the area that health economics is concerned with: the connection
between health and resources which are consumed in promoting it. These resources include
money, people, materials and time which could have been put to some other use.
The underlying problem is that people have almost infinite needs – not just for health but
also for food, shelter, entertainment and other types of consumption- but finite (limited)
resources with which to satisfy them. They therefore have to make choices, as individuals
and as groups, about which needs are the most important and how to use available
resources. Health economics attempts to illuminate those choices.
Issues to do with health financing are of particular importance and relevance to developing
countries. These countries have to typically grapple with (a) high health needs (b) particularly
acute resource shortages (c) administrative problems in collecting revenue and real access
problems for a sizeable proportion of the population

Assessment

1. Introduction to health economics

What is heath economics?

Health, public goals and health economics

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2. Health and Development: the broad issues

Health and growth

Health care and health
Health expenditure and health

3. Economics and Health Care Markets

Markets and health
Health care and market failure

4. Financing health care (1)

Financing health services
Current health spending in developing countries
What is the correct level of funding?
What are the features of a good health financing system?
Financing systems that pool the financial consequences of ill-health
Why tax funding is inadequate
Recent experience of social insurance

5. Financing health care (2)

User fees
Private health insurance
Community financing
Health saving accounts
Informal payments
Official development assistance

6. Allocating resources for health and health care

The use of cost information

Cost concepts and definitions
Allocating costs between programmes
Assessing costs for economic evaluation
Shadow pricing
Discounting and allowing for differences in time
Allowing for uncertainty

7. Evaluating health care interventions from an economic perspective,

Medical effectiveness
Cost effectiveness analysis
Cost utility analysis
Cost- benefit analysis
Economic evaluation as a tool for decision making

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8. Financial and economic appraisal of health care projects
Financial analysis: impact on health sector costs
Fiscal impact: paying for the added net costs
Economic analysis: do the community benefits exceed the costs

9. The role of Health Economics in Decision-making: Setting Priorities in Health Care

Priority setting: whose priorities?

The users’ perspective
The medical staff’s perspective
Geographical resource allocation
Rationing health care and other essential packages
Capital investments

Recommended Texts

The list is only indicative and is not exhaustive as any macroeconomics textbook may prove
very useful. The use of Journals and research in relevant Internet websites is encouraged to
enhance a deep understanding of macroeconomic issues.

Andargie, G (2008), Introduction to Health Economics - Ethiopia Public Health Training

Initiative, The Carter Centre, the Ethiopia Ministry of Health, and the Ethiopia M inistry of
Education.

Witter .S, Ensor T, Thompson R (2000) Health Economics for Developing Countries: A
Practical Guide, University of New York, Centre for Health Economics

Gelzen T. (2007) Health Economics and Financing,3 rd edition, Temple University, New
York.

Phillips C. J, (2005) Health Economics: An Introduction for Health Professionals, 1st Edition,
Blackwell Publishing, UK

Andargie G, (2008), Introduction to Health Economics, LECTURE NOTES

For All Health Science Students,